Servicers must replace plywood on existing properties

In November, Fannie Mae announced that mortgage servicers would be not only allowed but reimbursed to use clear boarding instead of plywood when securing houses that were in pre-foreclosure.

That announcement was not retroactive, meaning it only applied to new pre-foreclosures, not homes already in pre-foreclosure status.

But that’s not the case anymore, as Fannie Mae announced this week that it is moving away from plywood entirely.

In a bulletin sent to servicers this week, Fannie Mae said that it “no longer accepts plywood boards as an acceptable boarding solution on windows of its properties.”

The bulletin stated that servicers are now required to replace any and all plywood boarded windows on homes in pre-foreclosure with clear boarding or a replacement window.

And servicers have 90 days from the announcement’s effective date, March 29, 2017, to re-glaze/repair or clear board all unsecured and previously plywood boarded windows, Fannie Mae said.

The announcement doesn’t apply to homes in REO status, but for pre-foreclosures, plywood is now only allowed in very specific circumstances: if the home is “severely fire damaged” or in pre-demolition.

Plywood is also allowed on non-window openings, but servicers are encouraged to contact Fannie Mae on a case-by-case basis.

Fannie Mae’s bulletin also states that outside of those instances, the use of plywood is not allowed, even in short-term circumstances.

“Plywood must not be used on windows on properties that secure a Fannie Mae loan (non-HECM),” Fannie Mae said in the announcement.

“Servicers are allowed seven days to secure a property, including re-glazing/repairing or clear boarding, from the first time it is discovered vacant,” the announcement continued. “If it is discovered that windows need to be re-glazed/repaired or clear boarded any time after the initial secure timeframe, the appropriate service should be performed within three days of discovery.”

Fannie Mae said that where feasible, it prefers re-glazing or repairing the broken windows, but notes that the servicer or field services vendor should determine the appropriate strategy.

Cost, number of windows, likelihood of additional breaks, etc. should all be considered when making that decision, Fannie Mae said.

But Fannie Mae states that if a property with re-glazed/repaired windows is subsequently compromised, clear boarding must be used.

On clear boarding, or polycarbonate windows, Fannie Mae said that there are currently two products, SecureView and InvisiBoard, which have its approval.

“Currently, SecureView and InvisiBoard have demonstrated that their products have the appropriate quality and installation materials/processes as well as an appropriate level of impact resistance, thickness and translucency,” Fannie Mae said in the announcement.

Fannie Mae said that in addition, it will allow a minimum of 3/16th inch polycarbonate clear board.

“Fannie Mae is open to the development and use of other products but requires that those products be demonstrated in the field and approved by Fannie Mae prior to use,” the bulletin continued, adding that acrylic and Plexiglass products are not acceptable.

Robert Klein, founder and chairman of Safeguard Properties, Community Blight Solutions and SecureView, hailed the announcement.

“I think it’s phenomenal,” Klein told HousingWire this week.

“The last announcement was a game-changer,” Klein continued, referencing the Fannie Mae’s announcement from November.

“This is going to change the industry,” Klein said of the new announcement. “It’s going to change blight. This is the first proactive approach to dealing with these properties. It’s a game-changer on steroids. This is the right thing to do. Fannie Mae is the trailblazer.”

Ben Lane is the Senior Financial Reporter for HousingWire. In this role, he helps set a leading pace for news coverage spanning the issues driving the U.S. housing economy. Previously, he worked for TownSquareBuzz, a hyper-local news service. He is a graduate of University of North Texas.

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